Negotiating with International Customers, Partners, and Regulators

Chapter 19

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.

Introduction

• Face-to-face negotiations are an omnipresent activity in international commerce

• Once global marketing strategies have been formulated, then the focus of managers turns to implementation of the plans

• Plans are always implemented through face-to-face negotiations with business partners and customers from foreign countries

• Some of these negotiations can become quite complex, involving several governments, companies, and cultures

• Business negotiations between business partners from the same country can be difficult

• This chapter discusses the challenges and opportunities of international business negotiations

• Cultural differences in negotiation styles can cause problems in international at the levels of:

(1) Language

(2) Nonverbal behaviors

(3) Values

(4) Thinking and decision-making processes

The Pervasive Impact of Culture on Negotiation Behavior

Companies and countries do not negotiate—people doCompanies and countries do not negotiate—people do

Implications for Managers and Negotiators

1. selection of the appropriate negotiation team

2. management of preliminaries, including training, preparations, and manipulation of negotiation settings

3. management of the process of negotiations, that is, what happens at the negotiation table

4. appropriate follow-up procedures and practices

• Four steps lead to more efficient and effective international business negotiations, which include:

• Four steps lead to more efficient and effective international business negotiations, which include:

Negotiation Teams

1. Maturity2. Emotional stability3. Breadth of knowledge4. Optimism5. Flexibility6. Empathy7. Stamina 8. Willingness to use team assistance 9. Listening 10. Influence at headquarters

• Criteria for selecting successful negotiators include:• Criteria for selecting successful negotiators include:

Negotiation Preliminaries

1. Language skills 2. Social and diplomatic skills 3. Knowledge specific to the diplomatic

profession 4. Including diplomatic history and

international relations 5. Law 6. Economic 7. Politics8. International organizations9. Foreign policies

• Many companies in the United States provide employees with negotiations training on:

• Many companies in the United States provide employees with negotiations training on:

Planning For International Negotiations

1. Assessment of the situation and the people

2. Facts to confirm during the negotiation

3. Agenda

4. Best alternative to a negotiated agreement

5. Concession strategies

6. Team assignments

• The following checklist ensures proper preparation and planning for international negotiations:

• The following checklist ensures proper preparation and planning for international negotiations:

Negotiation Setting

1. Location2. Physical arrangements3. Number of parties4. Number of participants5. Audiences (news media,

competitors, fellow vendors, etc.)6. Communications channels7. Time limits

• There are at least seven aspects of the negotiation setting that should be manipulated ahead of time if possible:

• There are at least seven aspects of the negotiation setting that should be manipulated ahead of time if possible:

At the Negotiation Table

• Nontask sounding• Task-related exchange of

information• Persuasion• Concessions and agreement

• Differences in the expectations held by parties from different cultures are one of the major difficulties in any international business negotiation

• Differences in the expectations held by parties from different cultures are one of the major difficulties in any international business negotiation

• Everywhere around the world we have found that business negotiations proceed through four stages:

• Everywhere around the world we have found that business negotiations proceed through four stages: